Starting a Construction Company: Four Tips
The US construction industry was worth $1.9 trillion in 2021 - it’s a rapidly growing industry. Looking for a way in? Click here for construction company startup tips.
Author:James PierceReviewer:Alberto ThompsonMay 26, 2022412 Shares412K Views
The construction industry is one of the most lucrative industries to find yourself in - many entrepreneurs have started brands in other niches and venture into construction to grow and invest wealth. No matter what industry you're considering delving into, learning the basics of running a business is essential - it's something 68% of small business owners regrets not doing. Learning about the construction industry and starting a company is relatively easy. Below, we've outlined four crucial points pointers for starting a construction company.
Research The Construction Industry
You'll notice that most of the tips in this article are transferrable to any industry entrepreneurs show interest in - research is one of them. The construction industry is vast - from commercial to residential and what feels like everything in between. There are multiple entry points for entrepreneurs with no prior experience in the industry. Researching those entry points forms a solid knowledge basis about the construction industry as an entirety and the specific area you're interested in.
Some great resources for research include:
- US Small Business Administration
- US Bureau of Labor Statistics
- Construction Industry Publications and Statistics
- Local Industry Publications
Those will give you an idea of the current businesses within the construction and how they operate.
A Solid Business Plan
No stone should be left unturned - there's nothing worse than coming up against an obstacle and not having a plan for it. Take financial management, for example. Financial management becomes a big issue for rapidly growing brands that neglect a financial plan. Finding budget tips for construction companies, like mapping out expenses and creating incredibly detailed project plans, can save time and money in the long run.
Financial management plays a big part in a construction company's success, as every project relies heavily on investment. But it's not the only thing to consider in a business plan. That plan should also include an executive business summary, company overview, market analysis, business structure, marketing and sales, and products and services overview.
Registering Your Business
Idea and knowledge at the ready; it's time to register your business. The process of registering a construction business is the same as any business. Here are some simple bullet point steps to follow for registering a new business:
- Decide on the business entity, usually LLC or corporation.
- Get an employer identification number for your federal tax.
- Register with the relevant state agencies
- Register with the correct local agencies
Finding The Funding
Funding is essential, considering the construction industryis a costly sector that heavily relies on resources and materials that, thanks to inflation, are more expensive than ever. Here are some options for funding that construction entrepreneurs can consider:
- Small business loans
- Working capital loans
- Vendor financing
- Purchase order financing
It's slightly easier for construction companies to finance the first few months because payment can come before the job completes - therefore, there isn't a wait for the money to cover the cost of construction. However, it's almost essential to secure additional business funding.
Starting a construction industry in the current economic market is wise. There is a massive demand for the construction industry, including new commercial and residential properties, that make it a viable business opportunity. Following the tips above will help to streamline the setup process.
James Pierce
Author
James Pierce, a Finance and Crypto expert, brings over 15 years of experience to his writing. With a Master's degree in Finance from Harvard University, James's insightful articles and research papers have earned him recognition in the industry.
His expertise spans financial markets and digital currencies, making him a trusted source for analysis and commentary. James seamlessly integrates his passion for travel into his work, providing readers with a unique perspective on global finance and the digital economy.
Outside of writing, James enjoys photography, hiking, and exploring local cuisines during his travels.
Alberto Thompson
Reviewer
Alberto Thompson is an acclaimed journalist, sports enthusiast, and economics aficionado renowned for his expertise and trustworthiness. Holding a Bachelor's degree in Journalism and Economics from Columbia University, Alberto brings over 15 years of media experience to his work, delivering insights that are both deep and accurate.
Outside of his professional pursuits, Alberto enjoys exploring the outdoors, indulging in sports, and immersing himself in literature. His dedication to providing informed perspectives and fostering meaningful discourse underscores his passion for journalism, sports, and economics. Alberto Thompson continues to make a significant impact in these fields, leaving an indelible mark through his commitment and expertise.
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